Question

“RBI tightens Rules for JLFs” was the headline recently in many newspapers. What does JLF stands for?

A Joint Liability Finance Correct Answer Incorrect Answer
B Joint Liability Forum Correct Answer Incorrect Answer
C Joint Lenders’ Forum Correct Answer Incorrect Answer
D Joint Legal Forum Correct Answer Incorrect Answer
E Joint Liquidity Forum Correct Answer Incorrect Answer

Solution

JLFs are meetings held to revitalise stressed assets. In JLF banks attempt to red-flag stress early and check them by putting in place a corrective action plan (CAP).  RBI has lowered the threshold needed for implementing the corrective action plan (CAP). Now, the decisions agreed to by a minimum of 60% of creditors by value and 50% of creditors would now be valid to implement the CAP. Decision taken by the JLF would be binding on all other lenders. 

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